Monthly Archives: October 2010

In today’s economy, how can firms survive…

in: Member Forum / 0 Comments

In the current economy, architectural firms are expected to do more with less; less time, less staff, and less money. However, the formula of “better, faster, cheaper” often fails to accommodate project demands, complexity, or client and community expectations. In today’s economy, how can firms survive in an ever-increasing competitive market, while responding to the level of quality a project merits?

 

What is the value of design?

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1140 Formosa Ave.

1140 Formosa Ave. Lorcan O' Herlihy Architects.

Often, we only notice design when there’s something wrong with it—when we get our fingers caught in a door handle or our new cell phone gets poor reception. When things work well, we don’t have to think about them. They become a seamless part of our lives. No wonder that the value of design is recognized primarily in the breach.

The disappointing cell phone shows that design is about relationships, like the one between how you hold the phone and how the phone holds a signal. What is true of a phone is true of a building: its design is about relationships, not just “looks.” It’s about how look and feel, use and comfort, stability and durability come together to support one another. How light shapes space and space shapes light—and how light and space together suggest where we’d most like to sit. During the years of cheap energy, we were lazy about these things. No need to consider natural light; just add more bulbs! That’s a simple-minded way of thinking, just adding things up: frame a structure, add some walls, add a roof, add some windows and some lights and some fans—and just add up their costs, as well. But what if you arranged the windows so you didn’t need so many lights and fans? Design gets the parts working together, so the whole gives better performance for less money.

There are less tangible benefits, too, like the delight that people find in good buildings. And, believe it or not, delight can translate directly into dollars. In 2002, arcCA (Architecture California), the quarterly journal of the American Institute of Architects, California Council (AIACC), asked twenty-one non-architects from many walks of life what they thought about architects and architecture. The headmaster of a private middle- and high-school for boys recorded these thoughts:

“Thirty years ago, we were trying to build a functional academic building for the least cost on a limited campus. The result was useful, but it did not excite either donors or students. I was never congratulated for its low square foot costs or for the building itself. Fifteen years later, we spent a record amount on a grand athletic facility by a firm that specialized in such facilities. They convinced us that its openness and other somewhat expensive features would draw students into higher levels of participation. They were correct, and it also drew donors, excited by its promise. It has generated student activity ever since. I do not remember its square foot cost and am never asked.”

John Peterson, AIA, relates a similar story about the new home his firm, Peterson Architects, designed for San Francisco’s Homeless Prenatal Program in 2005. In The Power of Pro Bono (NY: Metropolis Books, 2010), he writes,

“Months after we completed our work, Martha Ryan, the founder and executive director of Homeless Prenatal, told me a story. The organization had a long-term funder who had given on the order of $30,000 annually. The funder came for a visit to the new facility, walked around, and liked it very much. That person called the next day and said, ‘Please make your application this year for ten times the historic amount . . . .’ Martha firmly believes it was due to the design of the new facility.”

Leading for-profit businesses recognize the same benefits. Apple Inc. is an example, with its crisp, inventive retail stores, the most recent of which—on Boylston Street in Boston—won a 2010 Honor Award from the AIACC. So what if they made a mistake on the new phone? Nobody’s perfect.

 

IDP Supervisor Code of Conduct

in: Academy of Emerging Professionals / 0 Comments

A Questionnaire is currently being sent out nationally to get information about each state and how they handle situations where an intern’s supervisor refuses to verify IDP hours.

I’d like to hear from you all, have you encountered situations like this? Perhaps you know of someone who has…

We’re looking at gathering information about the state licensing regulations as they relate to the Intern Development Program (IDP) and IDP participants.

Feel free to respond or email me as it may be a sensative personal matter not meant for a public forum.
haley.gipe@yahoo.com

Again, this is an effort to gather information and perhaps advocate on behalf of interns in our state, even make some positive change in the long run!!!

Thanks!

 

California’s Crisis as a Design Problem

in: ARCCA Archives / 1 Comment


The Golden State isn’t looking so golden these days, despite the fact that it is still the eighth largest economy in the world. California’s physical and social infrastructure is crumbling: its water system is on the verge of collapse, its transit network is the worst in the country, its social welfare net is being gutted, its prison system is overflowing, and its public K-12 education system ranks among the lowest in the nation. The state’s budget deficit, which started at $20 billion at the beginning of the year, will likely increase given the recent news that state tax revenues collected in April were unexpectedly low. Because the government already made severe cuts to programs last year in an attempt to close the deficit, the additional cuts this year are sure to be devastating. According to the US Census, California already has one of the leanest public workforces in the country. Governor Arnold Schwarzenegger’s newest revised budget plan doesn’t just reduce spending further, it eliminates entire welfare programs, including those providing assistance for families living below the poverty line. The governor also proposes further cuts to education, a system already at its breaking point. Are you a graduate of a Cal or Cal State institution? Your alma mater has seen cuts of 20–30%. Tuition has increased 50% since 2002 while aid to students has been reduced 50%.

How did we get here?
The answer isn’t simply the inevitable trickle-down of worldwide economic woes. California created the blueprint for its own demise decades ago, and we’re now seeing the dramatic culmination of these ill-conceived measures. More than ever, the state is in critical need of a fundamental redesign.

At the heart of the problem is California’s system of government. California is the only state in the nation that requires a “supermajority” to pass legislation concerning budget and revenue. In 1933, California voters imposed the 2/3 rule to pass a budget, and in 1978, Proposition 13 added the 2/3 requirement for raising taxes. As gridlock has become the norm thanks to increasingly polarized party politics, the supermajority system means that California ends up being controlled by a small conservative minority. If a 2/3 vote is necessary in both the Senate and the Assembly to pass any tax or budget, just a few senators or assemblypersons can hold the state hostage by demanding significant takeaways—from the weakening of environmental regulations, to a ballot measure establishing open primaries, to the special funding of pet projects—all in exchange for a vote to approve a state budget. Sixteen of the past twenty budgets in California have been late as a result of these minority holdouts, causing upheaval and interruption of critical government programs. This system is not a representational democracy, but rather a tyranny of the minority. As R. Jeffrey Lustig, professor of government at CSUS, recently wrote in the Sacramento Bee, “The state’s governing crisis is most evident in the legislature’s chronic inability to pass annual budgets without accounting gimmicks and fiscal fantasies. But beneath this visible stalemate lie deeper problems—a crisis of representation, a socioeconomic skewing of the electorate, and a widening separation of politics from cultural and economic reality.”

The irony, of course, is that with a simple majority vote on a ballot initiative in a general election, the California constitution can be amended, political principles overturned, and people’s lives radically changed. Constitutions are intended to be textual expressions of enduring democratic values. Yet, the California constitution has been amended over 500 times. It is now eight times longer than the US constitution—longer, in fact, than any other constitution on earth except for those of Alabama and the nation of India. It has been called everything from a “bloated mishmash” to a “patchwork mess.” The most recent successful ballot measure was Proposition 8, which, with just 52% of the popular vote, instituted a constitutional amendment banning gay marriage. So, in a state where less than half the electorate shows up to vote in any given election year, why can major political changes be instituted via a simple majority victory on a ballot initiative, but sustainable state budgets and necessary revenue measures require much more?

This year, several ballot propositions attempted to address these constitutional issues. “Repair California” called for a limited constitutional convention. Other initiatives called for a change to the 2/3 rule for passing a budget. “Californians For Democracy” advocated for changing the 2/3 rule to a simple majority for budget and revenue. Yet none of these efforts succeeded. The fact is that, in a state of 38 million, a grassroots movement can no longer get a measure on the ballot without having several million dollars in the bank to pay for the signature gathering process. While some of these initiatives were supported by business organizations and foundations, in the end they all lacked sufficient funding to collect the required signatures from 8% of registered voters before the April deadline. The notion that the ballot initiative process is an expression of direct democracy is largely a ruse, as special interests have more or less hijacked the process. As political scientist Thad Kousser explains, the ballot initiative process is a Catch-22: “It is hard to raise money for ballot measures that do not help any narrow interest, but nearly impossible to obtain broad support for measures that appear to provide a special benefit.”

These ballot measures will be back again next year, hoping for more success. Yet, it is difficult to imagine a situation in which Proposition 13 won’t act as the third rail in determining these political outcomes. California has a longstanding anti-tax and anti-spend culture. When polled about the state’s crisis, Californians consistently answer that they want the budget deficit remedied through spending cuts and not through new taxes. Yet, when asked which government services should be cut to balance the budget, they refuse to choose. When will Californians stop expecting something for nothing and come to terms with the realities of our inadequate tax structures? The California Tax Reform Association has suggested several tax policies that could be changed in order to close the deficit, but without adding to the tax burden of the general public or negatively impacting economic growth and recovery. Due to the supermajority rule, however, the hands of the legislative majority are more or less tied: it is dubious whether any of these necessary revenue measures will be instituted.

Why should the architecture profession involve itself in these political issues? On the most basic level, we all rely on government services for our lives and work: we want clean water to come out of the tap, we want to drive or bike on well-maintained streets, we want fire stations and hospitals in case of emergency, etc. While architects do maintain a political presence through The AIACC’s political action committees, these groups very much function in a vein of self-interest, focusing on what’s best for architecture as a business practice. The PACs monitor and lobby the legislature on issues that directly affect the profession, advocating for the appropriation of stimulus dollars or state support of energy-conscious design and technology. CALC PAC appeals to members by asking them to consider contributions to its efforts as “an investment in your bottom line.”

Of course, architects also exercise their political will by becoming engaged in socially responsible design—from green design to housing for at-risk populations and mitigation and reconstruction in the wake of natural disasters. There are many worthy causes that demand attention, though often we seem to be most drawn to those off our own shores. California needs serious intervention now before it reaches full status as a third world country. Architects are in a unique position to change this course: they can re-imagine the social as well as the built environment in ways that would never occur to lawmakers. As professionals, they have skills that are fundamentally lacking in the realm of politics: the organizational and creative prowess to assess needs, identify opportunities, model, coordinate stakeholders, and bring projects to fruition.

Community-based design practices can also be extremely useful when applied to the political arena. Early steps to realize a more expanded political role for architects have taken shape in the local chapters of “Citizen Architects” in California. And at the 2010 AIA Convention in Miami, the Citizen Architect Exchange offered opportunities to network and “explore the development and employment of design and leadership skills in the public arena.” AIA Citizen Architects, however, have yet to incorporate the design of civic processes and of government itself as important targets of activity. Design can be a tool to bring about systemic change, and when the federal stimulus dollars dry up, we’re going to need a more sustainable social, political, and economic environment in which to live and work. Architects can and should apply best practices and innovation to foster alternatives to business as usual in Sacramento. With our state structure collapsing under the weight of its own dysfunction, we really can’t afford to sit on the sidelines any longer.

Useful resources:
californiachoices.org
caltaxreform.org
keepcaliforniaspromise.org
cbp.org
californiansfordemocracy.com

 

Arid Lands Institute “Out of Water”

in: Academy of Emerging Professionals / 0 Comments

Woodbury University’s Arid Lands Institute is holding an Exhibition entitled “Out of Water” from September 21 – October 21. Hadley Arnold, from the Arid Lands Institute was the keynote speaker at the recent AEP Statewide Forum.

Please see the attached flier for more details.

File Attachment:
File Name: 9_10_OOW_eblast_postcard_v4.pdf
File Size: 87839

 

School Construction Cost Research Findings

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School Construction Cost Research Findings

Research Project – Examining the High Cost of School Construction in California

The American Institute of Architects, California Council, (AIACC) Capitol Forum, in partnership with the UC Berkeley Center for Cities and Schools, has released research findings regarding the high cost of school construction in California. (you must be a member to continue reading click here to join)The report, entitled “The Complex and Multi-Faceted Nature of School Construction Costs: Factors Affecting California,” examines the practices and policies which effect school construction, and analyzes comparative project level data to contrast California schools with similar facilities in other states. In doing so, the researchers determined some of the central factors in determining school construction cost in California. Among these were:

  • California’s regulatory structure
  • Local school district politics, policies & practices
  • Regional market conditions

The public’s investment in K-12 schools and universities is enormous. Any cost savings and increased efficiencies in this market sector translates into better planning processes and better buildings, in addition to more children being housed, less bonded indebtedness, and additional resources for other infrastructure needs.

The school construction delivery process should be simplified and made more cost effective.

As a concerned segment of the design and construction industry, The AIACC is looking for positive solutions to these complex questions. This study is the first step taking proactive measures to examine the policies and procedures surrounding the planning, design and construction of public school buildings in California.

To view the report, please click the image below.

 

Prompt Payment

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Overview

SB 1286 (Mountjoy), signed by Governor Wilson on August 10, 1995, was jointly sponsored by the American Institute of Architects, California Council (AIACC) and Consulting Engineers and Land Surveyors of California (CELSOC) to enforce prompt payment for works of improvement. The legislation was a response to the growing trend by public owners to delay, without cause, payments to design professionals.

The law applies to written contracts for private works of improvement entered into on or after January 1, 1996, and is divided into three areas: private works of improvement, public works of improvement, and public works of improvement which include the use of a subcontractor. The three areas are broken down as follows.

The Law

Section I. Written Contracts for Private Works of Improvement: Relates to contractual relationships between private contracting parties and design professionals.

  • The parties may agree to specifically include in the written contract a late payment penalty in lieu of any interest otherwise due as specifically set forth in the written contract;

  • This penalty shall be separate and in addition to the design professional’s liens, mechanic’s liens and stop notices for works of improvement, as specified, and;
  • Construction loan funds held by a lender pursuant to a construction loan agreement are not applicable under this section of law.

Section II. Written Contracts for Public Works of Imrovement: Relates to contractual relationships between public agencies and design professionals.

  • The public agency shall pay to the prime design professional any progress payment within 30 days of receipt of a written demand to pay and the final retention payment within 45 days of receipt of a written demand to pay;
  • The parties may agree to specifically include in the written contract a late payment penalty of 1 ½ percent of the unpaid amount per month, in lieu of any interest otherwise due;
  • The prevailing party in an action to collect amounts withheld or untimely paid in violation of this provision shall be entitled to reasonable attorney’s fees and costs.
  • This penalty shall be separate and in addition to the design professional’s liens, mechanic’s liens, and stop notices for works of improvement, as specified;
  • State agency contracts subject to Section 926.156 and 926.17 of the Government Code are exempt from the provisions of this law, and ;
  • Construction loan funds held by a lender pursuant to a construction loan agreement are not applicable under this section of law.

Section III. Public Works of Improvements/Sub-consultants:Relates to contractual relationships between prime design professionals and sub-consultant design professionals.

  • Prime design professionals who hire sub-consultant design professionals are responsible to pay the sub-consultant design professionals the amount due for payment of services not later than 15 days after receipt of progress and final payments;
  • Good faith disputes may allow the prime design professional to withhold from payment an amount not to exceed 150 percent of the disputed amount which shall not be subject to the penalties of this section;
  • Any amount wrongfully withheld or not timely paid to the sub-consultant design professional shall be entitled to a penalty of 1 ½ percent of the withheld amount, in lieu of an interest otherwise due, per month, for each month withheld;
  • The prevailing party in an action to collect amounts withheld or untimely paid in violation of this provision shall be entitled to reasonable attorney’s fees and costs;
  • This penalty shall be separate and in addition to the design professional’s liens, mechanic’s liens and stop notices for works of improvement, as specified, and;
  • Construction loan funds held by a lender pursuant to a construction loan agreement are not applicable under this section of the law.

For more information on prompt payment, please contact The AIACC Regulation and Practice Department at (916) 448-9082.

For more information please contact Director of Regulation & Practice Kurt Cooknick or 916/642-1706.

 

Mechanics Lien

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A mechanics’ lien is a claim against the real property on which the claimant has bestowed labor or furnished material for the value of the labor done or material furnished. Anyone who has furnished labor, services, material or equipment and has properly complied with notice requirements is entitled to file a mechanics’ lien. (you must be a member to continue reading click here to join)

This includes properly licensed architects, engineers, surveyors, and contractors. Process for Recording a Lien

I. Before recording a lien, a preliminary 20-day notice must be served on the property owner and construction lender in order for a claim of lien to be enforceable. The 20-day notice must be served before recording a lien and not later than 20 days after the actual date of construction begins, and must contain the following information:

  • A general description of the labor, services, and equipment to be furnished. If there is a construction lender, he or she shall be furnished with an estimate of the total cost of the services;
  • The name and address of the person providing the services;
  • The name of the person who contracted for the purchase of the materials or services;
  • A description of the job site sufficient for identification; and
  • Notice to Property Owner (in boldface type) of potential liens which might result from the owner’s failure to pay.

II. The notice may be served by delivering the notice personally or by first class registered or certified mail to the property owner’s residence, place of business, address shown on building permit, or the address shown on the construction trust deed.

  • If served by mail, the claimant (individual filing the lien) must prepare a Proof of Service Affidavit accompanied by either the return receipt of certified or registered mail, or by a photocopy of the record of delivery and receipt maintained by the post office, showing the date of delivery and to whom delivered, or, in the event of non-delivery, by the returned envelope.
  • If served personally, the claimant must prepare a Proof of Service Affidavit. (Proof of Service Affidavit forms are available at most stationary stores, construction bookstores, etc.). The “Proof of Service Affidavit” is an affidavit of the person making the service showing the time, place, and manner of service, facts showing that service was made in accordance with the statute, and the name and address of the person on whom a copy of the preliminary notice was served and, if appropriate, the title or capacity in which he or she was served.

III. The claim of lien is a written statement, signed and verified by your agent, containing the following information:

  • A statement of your demand after deducting all just credits and offsets;
  • The name of the owner or reputed, if known;
  • A general statement of the kind of services furnished by you;
  • The name of the person by whom you were employed or to whom you furnished services; and
  • A description of the site sufficient for identification.

IV. A lien can be recorded, in the office of the county recorder where the property is located, after furnishing services and before the expiration of:

  • 90 days after the completion of work of improvement if no notice of completion or cessation has been recorded;
  • 60 days after a notice of completion or notice of cessation has been recorded if you are in direct contract with the owner or 30 days if your contract is with someone other than the owner; or
  • 10 days after a notice of completion if the work of improvement is accomplished through the use of two or more original contracts.

(Standard forms for filing mechanics’ liens are available at most stationary stores, construction bookstores, etc.)

Filing Suit to Foreclose/Recording Notice of Lis Pendens

No lien binds any property for longer than 90 days after the recording of the claim of lien, unless within that time an action to foreclose the lien is commenced in a proper court. As soon as the complaint to foreclose the lien is filed, you must record a notice of the pendency of the action (notice of lis pendens) with the county recorder.

Release a Lien

If and when you are paid in full, you can release a mechanics’ lien by filing a release of lien with the county recorder’s office where the original lien was filed.

This is provided for informational purposes only and does not purport to be a legal opinion. For specific information regarding mechanics’ liens, see the California Code of Civil Procedure §409, §3084, §3086, §3097, §3097.1, §3115, §3116, §3117, §3144, §3147, and §3154 or consult an attorney. For more information please contact Director of Regulation & Practice at Kurt Cooknick or 916/642-1706.

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Limited Liability Partnership

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California Law Provides LLP Status

By Jennifer Wong Suzuki, Esq.

With the passage of Assembly Bill 469 (Cardoza) in 1998–one the AIACC’s sponsored pieces of legislation–architects can now join accountants and lawyers in forming limited liability partnerships (LLPs). A hybrid of a corporation and a general partnership, an LLP offers its owners limited liability and pass-through income tax treatment, yet can be run without the formalities generally required of a corporation.

How LLPs Operate

Functionally, an LLP is managed, operated and taxed on its income like a general partnership. Unless an agreement between the LLP partners provides otherwise, every LLP partner has an equal right to participate in the management and affairs of the LLP. This contrasts with a corporation which, typically, is managed by a Board of Directors elected by the shareholders. Also, LLPs are not required to have officers and directors, hold annual meetings, or keep formal records such as minutes or resolutions.

While an LLP must file an informational tax return, its income is passed through to its partners and taxed at the individual partner level, without any income tax assessment at the LLP entity level. Corporations are taxed on their income at the entity level and their shareholders are then taxed again at the individual level when the income is distributed as dividends. Although a corporation may avoid this result by making an election under Subchapter “S” of the Internal Revenue Code, eligibility restrictions imposed on shareholders and limitations on the deductibility of certain expenses may render the “S” status undesirable.

Notwithstanding pass-through tax treatment, for state tax purposes, an LLP is subject to an $800 annual California franchise tax for the privilege of doing business as an LLP. To view table of comparisons click here.

Restriction on Ownership

Like a professional architectural corporation formed pursuant to the Moscone-Knox Professional Corporation Act (in contrast to those formed under California’s General Corporation Law), ownership in an LLP is limited to licensed professionals. Thus, business managers, financial experts, financial investors, or others who are not licensed as architects are disqualified from participating in the ownership of an LLP.

The Scope of Limited Liability

Perhaps the greatest benefit of becoming an LLP is the rule that an LLP partner’s personal assets will generally NOT be at risk in the event of a financial disaster resulting from business losses, or errors and omissions or other tortious conduct of an employee or a co-LLP partner. Thus, the LLP law eliminates personal exposure for vicarious tort liability as well as liability for partnership debts and obligations such as bank loans and lease obligations. The LLP law does not, however, change the fact that an LLP partner will still be personally liable for his or her own errors and omissions; whether arising from his or her own acts or failures to act, or negligent supervision of associates and staff. This differs markedly from general partnership law which imposes joint and several liability on general partners for all tortious acts of their co-partners acting within the scope of their actual or apparent authority, and joint liability for all other partnership debts and obligations.

Security and Insurance

To mitigate the public’s concern over the limitation of liability discussed above, LLPs must maintain some form of security against potential malpractice claims. The LLP must maintain this security at all times during which it transacts business.

For architects, the security may consist of any one or a combination of: 1) professional liability insurance policies with minimum limits of $100,000 per claim, multiplied by the number of licensed persons rendering profession services on the LLP’s behalf, up to a maximum of $5 million, but in no event less than $500,000 even if there are fewer than five licensed persons; or 2) a trust, bank escrow, cash, or other similar and relatively liquid assets in an amount of at least $100,000, multiplied by the number of licensed persons rendering professional services on behalf of the LLP, up to a maximum of $5 million, but in no event less than $500,000 even if there are fewer than five licensed persons. In lieu of the above, an LLP may annually file a statement with the Secretary of State certifying that it had a net worth equal to or exceeding $10 million as of the most recently completed fiscal year.

If insurance is selected as the security mechanism, such insurance must, if reasonably available, be maintained for a minimum of three years following the LLP’s dissolution, or, the LLP must obtain an extended reporting period endorsement for the same period.

Unless the LLP has satisfied the security requirements through a certification of its net worth, each LLP partner, by virtue of his or her partnership status, is automatically deemed to guarantee payment of any claim to the extent security in the form of insurance and/or liquid assets at the required level is not provided.

Conclusion

The LLP law as it applies to architects became effective January 1, 1999. To form an LLP, architects need to file a certificate of registration with the California Secretary of State and pay a $70 filing fee. As of the date of this writing, the Board of Architectural Examiners has not implemented any rules requiring registration at the entity level.

Please click here to review a chart for a comparison of requirements for the formation of an LLP, Corporation, General Partnership, or Sole Proprietorship. This comparative overview may help guide you in determining the best method to pursue for your particular business endeavors and circumstances.

Jennifer Wong Suzuki, Esq. is a partner of the San Francisco law firm of Long & Levit LLP. Ms. Susuki specializes in corporate and partnership law as it relates to design professionals and construction law.

For details regarding this new law, please contact AIACC Director of Legislative Affairs Mark Christian, Hon. AIACC at 916/448-9082.

 

Allied

in: Sponsorship / 0 Comments

UC San Diego Price Center East - Yazdani Studio of Cannon Design -Photo courtesy of Timothy Hursley


Allied Member

Available to all interested allied design professionals, construction industry representatives, building product manufacturers, and service providers to the design and construction industry.

Why is it Important to Become an Allied Member

  • Access to more than 11,000 architects and design professionals in California can significantly increase business.
  • You’ll have qualified leads and the best of targeted marketing with AIACC member mailings.
  • Recent studies indicate that architects specify more than 70 percent of the building products used in construction today.
  • Design is becoming one of the most technology-based professions in the world.
  • It’s a two-way street: you need to interface with the architectural profession while we need easy access to reliable information on quality products and services.

BENEFITS

  • A complimentary mailing list of AIACC members in either Northern or Southern California (up to a $220 value!)
  • The AIACC journal arcCA
  • AIACC affiliation
  • A listing and link on www.aiacc.org
  • Access to the excellent insurance programs offered by the AIA Trust
  • Networking opportunities at a state and local level
  • Member pricing to attend AIACC events and conferences and more!

Cost
For information on cost related to becoming an allied member contact Mardriss Nelson.